In case you’re interested in how the book will read, here’s something that I wrote last night. It’s looking at one of the key stages in the iPod’s development: the very early stages. So here’s some draft content. It’s got notes and repetitions and things that need to be tweaked, and the name of the main interlocutor has been removed because, well, that’s for the book, isn’t it?

Comments welcome (eg “you left out the bit where…” or “just as important in 2002 was…”). And I’m really interested in hearing from anyone who:
– worked for/with Microsoft around the time it was trying to get Windows Media Player/Audio/Janus implemented

– worked for/with Microsoft on its “online services” system – MSN – while it was being passed by Google in 2002-4 for revenues and market share: what did Microsoft think, internally? (I’d be just as interested in talking to someone who mentioned this to Microsoft as an ex-Microsoftie.)

– worked for/with Google pre-IPO who could talk about its thinking over whether it wanted to confront Microsoft.

>>> The launch of the iPod in 2001 intrigued MusicMatch, and soon they were talking to Apple about the possibility of tweaking their software so that the millions of Windows users – a huge, untapped market for the iPod – could use it with their machine. At the time the iPod’s iTunes software only worked on Macs, and required a high-speed Firewire connection – which every Macintosh since 1999 had, but which was comparatively rare on Windows machines. Even so, enough had it (because the Windows PC market was so big and various) that it made sense for MusicMatch to offer it.

In July 2002, Apple introduced its second-generation iPod, with up to 20GB of storage – and introduced “iPod for Windows”, which used MusicMatch’s software to connect to Windows PCs.

BBB knew that the relationship with Apple was on borrowed time: “we could see that if it took off then they would write iTunes for Windows and steamroller us,” he recalls. But the experience was fascinating, and there was always the possibility that MusicMatch might be able to engineer some way to hold on to Apple – or perhaps to get Apple to hold onto it.

He had a number of meetings which Jobs attended: “generally he would walk in, say ‘this is shit’, and walk out,” he recalls. “Or he would say ‘this is far too big. It’s too bulky.’”

At the time the music business was in flux. The original incarnation of the file-sharing network Napster had been downed in the courts, but that had led to a hydra-headed decentralised sharing system called Gnutella, which had no central index as Napster had had. The record labels had nothing to aim at.

Since they were unable to shut down those networks, the record labels’ logical next move was to prevent music being ripped from CDs onto computers; that would prevent new songs being uploaded and shared, and should tamp down piracy. “Sony had had success in Japan with the MiniDisc format, which prevented you from copying songs back and forth,” said BBB. “Together with Sony Music, they seemed to have the formula. And Sony Electronics was huge in those days.” So the labels pressed for similar copy-prevention technology – known in the business as “digital rights management” software – to be included in music players and ripping software, and separately on CDs.

BBB adds his own context to the labels’ drive to get DRM instilled everywhere: “in the record business, everyone feels that they got screwed in their last deal. So in the next one they’re always looking to get the best possible deal. Songs will have different publishing rights in different countries. And the record labels and the publishers don’t see eye to eye. It’s a recipe for disagreement.” And for stalemate.

But Microsoft was listening to the record companies’ calls. It was a company full of skilled programmers who would be able to write software that would implement DRM to prevent copying. It quickly devised a strategy: using its Windows Media Audio format (which “independent” tests suggested gave better listening results and smaller files than MP3 at the same compression ratio). Files ripped on PCs using Windows Media Player, the default system, would be transferred with DRM onto digital music players so that the songs could not be copied onto another PC. That would tie the player to its owner’s computer. And uploading WMA files protected in that way to file-sharing networks would mean they wouldn’t work on the PCs of anyone else who downloaded them.

It was a brilliant strategy, except for two things. First, CD-ripping was still a minority sport limited to people who understood how to do it and what its purpose was; that meant they were specialists who were wise to Microsoft’s machinations especially the DRM,. (The high profile of Microsoft’s conviction in the antitrust case had eroded user trust that it was really acting in their best interests, rather than the interests of its partners.) They instead downloaded other programs – such as MusicMatch – which could play WMA files but could also rip songs into MP3 format.

The second problem was Microsoft overcooked the software, says BBB: “it was just too hefty for the hardware. It didn’t quite work right. There would be glitches, and the drivers didn’t quite work right, and the transfer was really slow.” That was because they relied on USB 1.1, rather than Firewire, connections. Firewire was about ?20-40 times faster[how much faster Firewire than USB] and USB 2.0, the faster standard that was comparable in speed, wouldn’t arrive until XXX[when USB 2 released?] and would take some time to become widespread in consumer electronics devices – particularly digital music players.

Then there was the industrial design aspect. BBB recalls seeing the prototype for the third-generation iPod during a discussion with Apple executives; Steve Jobs made an appearance – “he would kind of drift in and out”, is how he puts it – to pick the prototype up and criticise it for being too thick and then walk out.

A month of so later BBB was at the headquarters of Dell Computer in Austin, Texas. Dell was eager to get into this burgeoning market: it reasoned that it could use Microsoft’s software, and design its own hardware (as it did with PCs) but that unlike Apple it would be able to use its buying heft to drive down costs and so undercut Apple. The market was there for the taking.

BBB was handed a prototype for the Dell DJ player, which like the iPod used a 1.8” hard drive. “Jeez, this thing us HUGE!” he blurted out.

It was indeed noticeably deeper than Apple’s existing iPod, and substantially more than the forthcoming iPod – which MusicMatch knew about but about which its team had been sworn to secrecy, on pain of extremely costly legal action. “One of the Dell designers explained that that was because the Toshiba version of the hard drive had its connector on the side, and the Hitachi one had it on the bottom, but because they were dual-sourcing they could get the price down by 40 cents,” BBB recalls. “That was the difference in a nutshell. Apple was all about the industrial design and getting it to work. Dell was all driven by their procurement guys.”

[NUMBER IPODS SOLD PREV QUARTER]
[AUTOSYNC IN IPOD]

In September 2003 Apple launched its third-generation iPod, supplanting the one that Dell’s engineers had been comparing their design against. This one was notable for two features: four touch buttons just below the screen, instead of being embedded into the scroll wheel – a feature that was abandoned in the next generation as unwieldy – and a proprietary 30-pin dock connector on the bottom of the device. That allowed it to connect to a Firewire or USB 2.0 port, via a cable. (The buyer had to specify which cable they wanted.)
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